When Google is telling the OEMs who had planned CES 2011 Google TV rollouts to pull back and delay announcements so that they can "refine" the software then you know things are bad. 2011 is gone for Google TV, and by 2012 they will be facing better, strong competition from people who actually know what they are doing in the consumer space. Apple will keep getting better, Netflix and Amazon will get aggressive about going directly to the TV manufacturers, Roku and Boxee will continue to improve and expand their distribution pipeline, etc. Google sent a wake-up call to the content creators and distributors (who returned to favor to Google) that will also drive most of them to partner with one or two non-Google internet-enabled TV distribution platforms.
Google whiffed in making a play for the TV space and their competitors are not going to give them an opportunity for a second chance.